Quick Commerce Targets E-commerce Turf In India

More details: Found here

Even as quick commerce startups are retreating, consolidating or shutting down in many parts of the world, the model is showing encouraging signs in India. Consumers in urban cities are embracing the convenience of having groceries delivered to their doorstep in just 10 minutes. The companies making those deliveries — Blinkit, Zepto and Swiggy's Instamart — are already charting a path to profitability.

Analysts are intrigued by the potential of 10-minute deliveries to disrupt e-commerce. Goldman Sachs recently estimated that Blinkit, which Zomato acquired in 2022 for less than $600 million , is already more valuable than its decacorn food delivery parent firm .

As of earlier this year, Blinkit held a 40% share of the quick commerce market, with Swiggy's Instamart and Zepto close behind, according to HSBC. Flipkart, owned by Walmart, plans to enter the quick commerce space as soon as next month, further validating the industry's potential.

Investors are also showing strong interest in the sector. Zomato boasts a valuation of $19.7 billion despite minimal profitability, processing around 3 million orders a day. In comparison, Chinese giant Meituan, which processes more than 25 times as many orders daily, has a market cap of $93 billion. Zepto, which achieved unicorn status less than a year ago, is finalizing new funding at a valuation exceeding $3 billion, according to people familiar with the matter.

Consumers are buying the quick commerce convenience, too. According to a recent Bernstein survey, the adoption was highest among millennials aged 18 to 35, with 60% of those in the 18 to 25 age bracket preferring quick commerce platforms over other channels. Even the 36+ age group is adopting digital channels, with over 30% preferring quick commerce.

While India's rapid urbanization makes it a prime target for quick commerce, the industry's unique operational model and infrastructure needs could limit its long-term growth and profitability. As competition intensifies, the impact of quick commerce is likely to be felt more acutely by India's e-commerce giants. But what makes India's retail market so attractive for quick commerce players, and what challenges lie ahead?